SETTLEMENT AGREEMENT
Exhibit 10.1
Execution Copy
This SETTLEMENT AGREEMENT (this “Agreement”) is entered into as of the 23rd
day of May, 2011, by and among Franklin Credit Asset Corporation, a Delaware corporation
(“Franklin Asset”), Franklin Asset, LLC, a Delaware limited liability company
(“FA”), and the other Borrowers listed on Schedule 1 to the signature pages of this
Agreement (such other Borrowers, together with Franklin Asset and FA, the “Legacy Loan
Parties”); Franklin Credit Holding Corporation, a Delaware corporation (“Holding”),
Franklin Credit Management Corporation, a Delaware Corporation (“FCMC”) (the Legacy Loan
Parties, Holding and FCMC are referred to collectively as the “Franklin Loan
Parties”);Huntington Finance LLC, as Lender under the Legacy Credit Agreement referred to
below, The Huntington National Bank (“Huntington”) and M&I Xxxxxxxx & Xxxxxx Bank
(“M&I”), each as a Lender under the Legacy Credit Agreement referred to below and as a
party to the ISDA Agreements referred to below, and The Huntington National Bank, in its capacity
as Administrative Agent under the Legacy Credit Agreement (the “Administrative Agent”) (BOS
(as defined below), Huntington Finance LLC, Huntington, M&I and the Administrative Agent are
referred to collectively as the “Secured Parties”).
RECITALS:
WHEREAS, the Administrative Agent, Huntington, Huntington Finance LLC, M&I and BOS (USA)
Inc.(“BOS”), as Lenders, and Franklin Asset, FA and the other Legacy Loan Parties, as Borrowers,
entered into a certain Amended and Restated Credit Agreement, dated as of March 31, 2009 (as
amended prior to the date hereof, the “Legacy Credit Agreement”);
WHEREAS, Huntington and FCMC entered into (i) a certain 1992 ISDA Master Agreement dated as of
February 27, 2008 (the “ISDA Master Agreement”), (ii) certain Schedules to the 1992 ISDA
Master Agreement dated as of February 27, 2008, and certain other dates (the “ISDA
Schedules”), and (iii) certain Interest Rate Swap Confirmations dated as of February 27, 2008,
April 30, 2008, and certain other dates (the “ISDA Confirmations”), and each of the ISDA
Master Agreement, the ISDA Schedules and the ISDA Confirmations were thereafter initially assigned
to Holding pursuant to an Assignment Agreement dated as of December 19, 2008 (the “First ISDA
Assignment”), and subsequently assigned to the Legacy Loan Parties pursuant to a certain
Assignment Agreement dated as of March 31, 2009, which Assignment Agreement, together with the
First ISDA Assignment, are referred to as the “ISDA Assignments” (the ISDA Master
Agreement, the ISDA Schedules, the ISDA Confirmations and the ISDA Assignments, each as amended,
restated, modified or supplemented from time to time prior to the date hereof, are collectively
termed the “ISDA Agreements”);
WHEREAS, pursuant to a certain Risk Participation Agreement dated as of June 30, 2008 (the
“Risk Participation”), M&I purchased a risk participation in the swap transactions
evidenced by the ISDA Agreements, and after the termination of such swap transactions pursuant to
the ISDA Agreements, paid certain amounts owing to Huntington on account of its Risk Participation
and is subrogated to the extent of the amount of such payments with respect to “close-out”
obligations due and owing to Huntington under the ISDA Agreements from the Franklin Loan Parties;
and
WHEREAS, the Legacy Loan Parties have failed to pay certain “close-out” payments due and owing
to Huntington and M&I under the ISDA Agreements, and the Administrative Agent has determined that
such payment defaults constitute a Default under Section 8.01(b) of the Legacy Credit
Agreement (the “Specified Default”), and the Legacy Loan Parties have not agreed that such
failure to make payments constitutes a Default under the Legacy Credit Agreement and have requested
that the Administrative Agent and the Required Lenders agree to waive the Specified Default, reduce
and satisfy certain indebtedness and amend certain provisions of the Legacy Credit Agreement,
release Holding from a certain limited recourse guaranty, and Huntington has asked FA and the other
Legacy Loan Parties to consent to and transfer to Huntington the REIT Collateral referred to below,
and the parties have agreed to settle and resolve certain other claims and issues, all as set forth
in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree and represent
and warrant as follows:
1. Defined Terms. All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the Legacy Credit Agreement.
2. Representations as to REIT Collateral, Surrender of the REIT Collateral. Franklin
Asset, LLC represents and warrants to the Administrative Agent and Huntington (i) that it has
obtained the unanimous consent of its members and beneficial owners to transfer, assign and
surrender to Huntington in its capacity as Lender under the Legacy Credit Agreement all right,
title and interest in (a) 154 shares of common stock (evidenced by Certificate No. 5) of Huntington
Preferred Capital II, Inc., (b) 4,724.1330831 shares of class C Preferred Stock (evidenced by
Certificate No. C-1) of Huntington Preferred Capital II, Inc. (the common shares described in
clause (a) and the preferred shares described in clause (b) together are referred to as the
“REIT Shares”), and (c) as of the Settlement Effective Date and at all times thereafter,
all cash, securities, rights to receive dividends, other rights, income, distributions of interest
and any other distributions, equity interests and property arising thereon or in connection
therewith, replacements, exchanges, and substitutions therefor, securities accounts in which any of
the above are held, all certificates or other instruments representing any of the foregoing and all
security entitlements, and the proceeds (including dividends) of all the foregoing (together with
the REIT Shares, the “REIT Collateral”), (ii) that the REIT Collateral is free and clear of
any Liens other than Liens in favor of the Administrative Agent in connection with the Legacy
Credit Agreement and the Loan Documents, (iii) as of the Settlement Effective Date, all of the REIT
Shares are held of record and owned by Franklin Asset, LLC, free and clear of any restrictions on
transfer, taxes, options, warrants, purchase rights, contracts, commitments, equities, claims, and
demands, and (iv) Franklin Asset, LLC has good and valid title to all of the REIT Collateral. As
of the Settlement Effective Date, in consideration of the Legacy Reduction and the further Debt
Reduction each referred to below, Franklin Asset, LLC hereby transfers, assigns and surrenders (the
“Surrender”) to Huntington, in its capacity as Lender under the Legacy Credit Agreement,
all of its right, title and interest in the REIT Collateral, free and clear of all Liens other than
Liens in favor of the Administrative Agent pursuant to the Legacy Credit Agreement and the other
Loan Documents. On the Settlement Effective Date, Franklin Asset, LLC agrees to execute and
deliver the stock powers in the form attached as Exhibit 2 to further evidence the Surrender.
3. Debt Reduction. As of the Settlement Effective Date, in consideration for the
Surrender of the REIT Collateral, Huntington agrees to accept the Surrender of the REIT Collateral,
and Huntington and M&I, as applicable, further agree as follows:
(i) Huntington, in its capacity as a Lender, agrees to reduce the amounts owing on
Huntington’s portion of the Tranche A Advances under the Legacy Credit Agreement by an amount equal
to $478,000,000 (the “Legacy Reduction”). After the application of the Legacy Reduction,
each of the Legacy Loan Parties agrees (i) that it jointly and severally owes, without offset,
recoupment or dispute to
the Lenders under the Legacy Credit Agreement and the other Loan Documents, as of May 23,
2011, the aggregate principal sum of $172,842,351.34, in respect of Tranche A, the aggregate
principal sum of $434,345,117.87, in respect of Tranche B, and the aggregate principal sum of
$171,085,453.92, in respect of Tranche C, as further set forth in Schedule 3 hereto, in each
instance, together with interest, fees, expenses, and other charges owing pursuant to the terms of
the Legacy Credit Agreement and the other Loan Documents;
2
(ii) Huntington, in its capacity as a party to the ISDA Agreements, agrees in favor of the
Legacy Loan Parties, Holding and FCMC to fully satisfy the “close out” indebtedness relating to the
following swap transactions terminated as of January 25, 2011: (1) (ref: #20165HU) with an
effective date of March 5, 2008, termination date of March 5, 2011, and notional amount of
USD70,000,000; (2) (ref: #20166HU) with an effective date of March 5, 2008, termination date of
March 5, 2012, and notional amount of USD45,000,000; (3) (ref: #20733HU) with an effective date of
May 5, 2008, termination date of May 5, 2011, and notional amount of USD175,000,000; and (4) (ref:
#20734HU) with an effective date of May 5, 2008, termination date of May 5, 2011, and notional
amount of USD100,000,000, in the aggregate “close-out” amount of $5,687,141.60 (net of amounts owed
to M&I pursuant to subrogation);
(iii) M&I, in its capacity as a party entitled to subrogation under the terms of its Risk
Participation in the ISDA Agreements agrees in favor of the Legacy Loan Parties, Holding and FCMC
to fully satisfy the “close out” indebtedness relating to the swap transactions terminated as of
January 25, 2011, and described above in paragraph 3(ii), in the aggregate sum of $775,519.31;
(iv) Huntington, in its capacity as a party to the ISDA Agreements agrees in favor of the
Legacy Loan Parties, Holding and FCMC to fully satisfy the “close out” indebtedness relating to the
following swap transactions terminated as of March 31, 2009: (1) (ref: #20164HU) with an effective
date of March 5, 2008, termination date of March 5, 2010, and notional amount of USD150,000,000;
and (2) (ref: #20163HU) with an effective date of March 5, 2008, termination date of March 5, 2010,
and notional amount of USD240,000,000, in the aggregate “close-out” amount of $$7,252,969.68 (net
of amounts owed to M&I pursuant to subrogation); and
(v) M&I, in its capacity as a party entitled to subrogation under the terms of its Risk
Participation in the ISDA Agreements agrees in favor of the Legacy Loan Parties, Holding and FCMC
to fully satisfy the “close out” indebtedness relating to the swap transactions terminated as of
March 31, 2009, and described above in paragraph 3(iv), in the aggregate sum of $$989,041.32;
(the Legacy reduction and other debt satisfaction by Huntington and M&I referred to in
sub-paragraphs (ii), (iii), (iv) and (v) of this Paragraph 3 are collectively termed the “Debt
Reduction”).
4. Amendment to Legacy Credit Agreement. On the Settlement Effective Date, the
Administrative Agent, the Required Lenders and the Legacy Loan Parties agree to execute and deliver
Amendment No. 3 to Amended and Restated Credit Agreement (“Xxxxxx Xxxxxxxxx No. 3”) in the
form attached as Exhibit 4. In connection with Xxxxxx Xxxxxxxxx No. 3, Holding shall deliver to
the Administrative Agent an audited “stand alone” balance sheet of Franklin Credit Loan Servicing
LLC as of December 31, 2010, in all respects satisfactory to the Administrative Agent.
5. Release of Lien on Membership Interests. On the Settlement Effective Date,
pursuant to the terms of Xxxxxx Xxxxxxxxx No. 3, Holding and the Administrative Agent agree to
execute and deliver a Second Amendment to Amended and Restated Pledge Agreement in the form
attached as Exhibit 5, inter alia, releasing the Lien of the Administrative Agent in the membership
interests of
Franklin Credit Loan Servicing LLC.
3
6. Discharge of Guaranty. On the Settlement Effective Date, pursuant to the terms of
Xxxxxx Xxxxxxxxx No. 3, Holding and the Administrative Agent agree to execute and deliver a
Discharge of Limited Recourse Guaranty in the form attached as Exhibit 6, inter alia, releasing
Holding from any obligation under its Limited Recourse Guaranty dated March 31, 2009.
7. Amendment to Licensing Credit Agreement. On the Settlement Effective Date,
Huntington, Huntington Finance LLC, Holding and FCMC agree to execute and deliver Amendment No. 4
to Amended and Restated Credit Agreement (Licensing) in the form attached as Exhibit 7, which,
inter alia, amends a financial covenant and extends the maturity of a certain Amended and Restated
Credit Agreement (Licensing) dated March 31, 2009 (the “Licensing Credit Agreement”) among,
Huntington, as administrative agent under such Licensing Credit Agreement, Huntington, Huntington
Finance LLC, Holding and FCMC.
8. Waiver of Specified Default. As of the Settlement Effective Date, pursuant to the
terms of Xxxxxx Xxxxxxxxx No. 3, the Administrative Agent and the Required Lenders, agree to waive
the Specified Default.
9. Conditions Precedent to Closing. This Agreement shall be effective when executed
and delivered by each of the Franklin Loan Parties, the Administrative Agent, the Required Lenders
under the Legacy Credit Agreement, M&I, Huntington, and Huntington Finance LLC, as of May 23, 2011
(the “Settlement Effective Date”) upon the execution and delivery of each instrument or
document listed below and upon satisfaction of each of the other following conditions precedent, in
each case in a manner satisfactory to the Administrative Agent and Huntington. Notwithstanding
anything herein to the contrary, the parties hereto shall not be obligated to close on any portion
of the transactions contemplated hereunder unless the following conditions are satisfied or waived
by the applicable party or parties:
(a) Settlement Documents:
| (i) | four duly executed originals of this Agreement; | ||
| (ii) | two duly executed originals of the Settlement Term Sheet; | ||
| (iii) | one duly executed original of a Stock Power for Certificate No. C-1 for 154 shares of common stock of Huntington Preferred Capital II, Inc.; | ||
| (iv) | one duly executed original of a Stock Power for Certificate No. 5 for 4,724.1330831 shares of class C Preferred Stock of Huntington Preferred Capital II, Inc.; | ||
| (v) | one duly executed original of a Closing Certificate and Resolutions for each Franklin Loan Party; | ||
| (vi) | four duly executed originals of Amendment No. 3 to Amended and Restated Credit Agreement; | ||
| (vii) | two duly executed originals of the Second Amendment to Amended and Restated Pledge Agreement; | ||
| (viii) | two duly executed originals of the Release of Limited Recourse Guaranty of Holding; and | ||
| (ix) | two duly executed originals Amendment No. 4 to Amended and Restated Credit Agreement (Licensing); |
4
(this Agreement and the other loan documents or other instruments referred to in items 9(a)
(ii)
through and including (ix) above, together with each other agreement, amendment,
restatement, supplement or modification executed in connection with any of the foregoing or
the transactions contemplated by this Agreement, whether contemporaneously herewith or after
the Settlement Effective Date, shall be collectively referred to as the “Settlement
Documents”); and
(b) the other closing deliveries listed on Exhibit 9(b) attached.
10. General Representations and Warranties of the Franklin Loan Parties. As of the
Settlement Effective Date, each Franklin Loan Party hereby represents and warrants as to itself to
each Secured Party:
(a) Each Franklin Loan Party (i) is a corporation or limited liability company duly formed,
validly existing and in good standing under the laws of the jurisdiction of its formation; (b) has
all requisite power, and has all governmental licenses, authorizations, consents and approvals,
necessary to own its assets and carry on its business as now being conducted, except where the lack
of such licenses, authorizations, consents and approvals would not be reasonably likely to have a
material adverse effect on such Franklin Loan Party; (c) is qualified to do business and is in good
standing in all other jurisdictions in which the nature of the business conducted by it makes such
qualification necessary, except where failure so to qualify is not reasonably likely (either
individually or in the aggregate) to have a material adverse effect on such Franklin Loan Party;
and (d) is in material compliance in all material respects with all Requirements of Law.
(b) Neither (i) the execution and delivery of this Agreement nor any other Settlement
Document, nor (ii) the consummation of the transactions contemplated herein will conflict with or
result in a breach of the charter, by-laws, limited liability company agreement (written or oral),
certificate of formation (or equivalent documents or oral agreements) of such Franklin Loan Party,
or any applicable law, rule or regulation, or any order, writ, injunction or decree of any
Governmental Authority or other agreement or instrument to which any Franklin Loan Party is a party
or by which any of them or any of their property is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or result in the creation or
imposition of any Lien upon any property of any Franklin Loan Party pursuant to the terms of any
such agreement or instrument.
(c) Each Franklin Loan Party has all necessary power, authority and legal right to execute,
deliver and perform its obligations under this Agreement and the other Settlement Documents; the
execution, delivery and performance by each Franklin Loan Party have been duly authorized by all
necessary action on its part; and this Agreement and the other Settlement Documents have been duly
and validly executed and delivered by each Franklin Loan Party and constitutes a legal, valid and
binding obligation of each Franklin Loan Party, enforceable against each Franklin Loan Party in
accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable
principles relating to enforceability.
(d) No authorizations, approvals or consents of, and no filings or registrations with, any
Governmental Authority, or any other Person, are necessary for the execution, delivery or
performance by any Franklin Loan Party of this Agreement for the legality, validity or
enforceability thereof.
(e) No Franklin Loan Party intends to incur, or believes that it has incurred, debt beyond its
ability to pay such debts as they mature. No Franklin Loan Party is taking any action to commence
insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of such Franklin Loan Party or any
of its
assets. No Franklin Loan Party is pledging or transferring any Collateral or other assets with any
intent to hinder, delay or defraud any of its creditors.
5
11. Release of Claims; Communications.
(a) As of the Settlement Effective Date, each Franklin Loan Party, for itself and its
respective successors and assigns, agents, employees, officers and directors, hereby forever
waives, relinquishes, discharges and releases all defenses and Claims (as defined below) of every
kind or nature, whether existing by virtue of state, federal, or local law, by agreement or
otherwise, against (i) each Secured Party, the issuer of the REIT Shares, and their respective
successors, assigns, directors, officers, shareholders, agents, employees and attorneys, (ii) each
participant in any Advances, such participant’s successors, assigns, directors, officers,
shareholders, agents, employees and attorneys, (iii) each obligation evidenced by any credit
agreement, any promissory note, instrument or other Loan Document or by the Licensing Credit
Agreement, any promissory note, instrument or other loan document executed in connection therewith,
and (iv) any collateral security in connection with any of the foregoing, including, without
limitation, the REIT Collateral, in each instance, which any Franklin Loan Party may have or may
have made at any time up through and including the Settlement Effective Date, including without
limitation, any affirmative defenses, counterclaims, setoffs, deductions or recoupments. Nothing
contained in this Agreement prevents enforcement of this waiver and release.
(b) As of the Settlement Effective Date, Huntington, in its capacity as party to the ISDA
Agreements, for itself and its respective successors and assigns, agents, employees, officers and
directors, agrees that it forever waives, relinquishes, discharges and releases all defenses and
Claims of every kind or nature, whether existing by virtue of state, federal, or local law, by
agreement or otherwise, arising solely in connection with the ISDA Agreements against each Franklin
Loan Party and their respective successors, assigns, directors, officers, shareholders, agents,
employees and attorneys. Nothing contained in this Agreement prevents enforcement of this waiver
and release.
(c) As of the Settlement Effective Date, M&I, in its capacity as party to the Risk
Participation, for itself and its respective successors and assigns, agents, employees, officers
and directors, agrees that it forever waives, relinquishes, discharges and releases all defenses
and Claims of every kind or nature, whether existing by virtue of state, federal, or local law, by
agreement or otherwise, arising solely in connection with the ISDA Agreements or the Risk
Participation against each Franklin Loan Party and their respective successors, assigns, directors,
officers, shareholders, agents, employees and attorneys. Nothing contained in this Agreement
prevents enforcement of this waiver and release.
As used in paragraphs (a), (b), and (c) above, “Claims” means all debts, demands, actions,
causes of action, suits, dues, sums of money, accounts, bonds, warranties, covenants, contracts,
controversies, promises, agreements or obligations of any kind, type or description, and any other
claim or demand of any nature whatsoever, whether known or unknown, accrued or unaccrued, disputed
or undisputed, liquidated of contingent, in contract, tort, at law or in equity and includes,
without limitation, all causes of action, liabilities and rights arising under this Agreement or by
virtue of any other credit agreement, promissory note or other loan document or any transaction
entered into in connection herewith or therewith.
(d) Each party to this Agreement acknowledges and agrees that one purpose of this Agreement is
to facilitate the resolution of the Specified Default and that, consistent with such purpose, no
part of any oral or written communications between or among any Franklin Loan Party or any Secured
Party regarding the transactions contemplated in this Agreement, exclusive of this written
Agreement
itself (collectively, “Communications”), shall be utilized or deemed to be admissible
as evidence in any litigation involving any party to this Agreement. Communications shall be
deemed to constitute “compromise negotiations,” and not to constitute evidence that is
“discoverable,” as those phrases are used in the Federal Rules of Evidence and any applicable state
rules of evidence, and no Communications shall be deemed to constitute evidence that is otherwise
admissible for any other purpose.
6
(e) The release and communication provisions provided by paragraphs (a), (b) (c) and (d) of
this Section 11, shall survive and continue in full force and effect notwithstanding the occurrence
of a Default other than the Specified Default.
12. Reservation of Rights; No Novation; Ratification.
(a) Except solely with respect to the Legacy Reduction and the amounts satisfied under the
ISDA Agreements, all obligations, indebtedness, liabilities and other amounts owing under the
Legacy Credit Agreement and the other Loan Documents to the Administrative Agent and the Lenders,
whether on account of principal, interest or otherwise, shall remain outstanding and in effect, as
evidenced by the Loan Documents and shall constitute Obligations owing under the Legacy Credit
Agreement.
(b) All obligations, indebtedness, liabilities and other amounts owing under the Licensing
Credit Agreement, the security agreements, including without limitation a certain Amended and
Restated Security Agreement (Licensing) and an Investment Property Security Agreement, each dated
March 31, 2009, and the other loan documents executed in connection therewith, whether on account
of principal, interest or otherwise, shall remain outstanding and in effect, as evidenced by such
Licensing Credit Agreement and such other loan documents and shall constitute Obligations owing
under the Licensing Credit Agreement.
(c) All obligations, indebtedness, liabilities and other amounts owing from XXXX 0000 M Corp., aka
XXXX 0000 M Corporation (UBS), FCMC 2006 K Corp., aka FCMC 2006 K Corporation (Equifirst), and Flow
2006 F Corp., aka Flow 2006 F Corporation or other applicable borrowers under the Franklin Master
Agreement, the promissory notes and the other loan documents evidencing the Static Loans in favor
Huntington or any participant in such loans, whether on account of principal, interest or otherwise
shall remain outstanding and in effect, as evidenced by the Franklin Master Agreement, the
promissory notes and the other loan documents evidencing the Static Loans and shall constitute
obligations owing thereunder.
(d) All obligations, indebtedness, liabilities and other amounts that may be owing at any time
to the Administrative Agent under a certain Deferred Payment Agreement dated as of September 22,
2010 (the “Deferred Payment Agreement”) entered into among the Administrative Agent, FCMC
and Xxxxxx X. Xxxx or any other documents relating thereto shall remain outstanding and in effect,
as evidenced by the Deferred Payment Agreement and such other documents and shall constitute
obligations owing thereunder.
(e) All obligations, indebtedness, liabilities and other amounts owing from any Franklin Loan
Parties under any deposit account or other agreement in respect of banking services (other than the
ISDA Agreements) in favor Huntington, M&I or BOS shall remain outstanding and in effect, pursuant
to the terms of each agreement governing such services and shall constitute obligations owing
thereunder.
7
(f) Neither this Agreement nor any Settlement Document (i) is given in substitution for any
Loan Document or other agreement referred to in Section 12(a) through (e) above, (ii) is payment of
any
amounts due by any Franklin Loan Party under any Loan Document or other agreement (except that
the Legacy Reduction will reduce the Legacy Loan Parties’ Obligations owing to Huntington under the
Legacy Credit Agreement and the satisfaction of the liabilities and obligations under the ISDA
Agreements shall satisfy all liabilities and obligations arising under such ISDA Agreements), and
(iii) is in any way intended to constitute a novation of any Commercial Loan or Advance under the
Legacy Credit Agreement or any Loan Document, any obligation under the Licensing Credit Agreement
or any loan document in connection therewith, any obligation in respect of any Static Loan, any
obligation in respect of the Deferred Payment, or under any agreement for banking services. Each
security interest, Lien, security agreement and financing statement granted, created or filed by,
under or in connection with the Legacy Credit Agreement or any other Loan Document, the Licensing
Credit Agreement or any Existing Forbearance Agreements or any predecessor thereto shall remain in
full force and effect in all respects and unaffected by this Agreement.
(g) Each Franklin Loan Party acknowledges and agrees that, except as specifically set forth in
this Agreement, each Secured Party (i) reserves the right to enforce each and every term of any
loan document and any rights, actions, and claims arising in connection therewith, including,
without limitation, any rights, indemnity provisions, actions and claims arising under or in
connection with the Legacy Credit Agreement (other than the Legacy Reduction), the Licensing Credit
Agreement, the Static Loans, the Deferred Payment Agreement, any servicing agreement that remains
in place, and any ongoing consumer litigation; (ii) is under no duty or obligation of any kind or
any nature to grant any Franklin Loan Party any forbearance or additional extension; (iii) shall
not be construed to waive, relinquish or estop any Secured Party from asserting any Secured Party’s
rights under this Agreement or any loan document or applicable law; and (iv) shall be under no
impediment to any Secured Party’s right to pursue any and all remedies available to it on or after
the Settlement Effective Date.
13. Closing. The consummation of the transactions contemplated by this Agreement
shall take place at Columbus, Ohio at the offices of Xxxxxx Xxxxxx Xxxxxx & Xxxxxx LLP at 11:00
a.m., on May 23, 2011. In the event the Closing is not consummated prior to May 27, 2011, this
Agreement shall automatically terminate, and the parties hereto shall no longer have any
obligations or liabilities hereunder.
14. Brokers’ Fees. Neither any Franklin Loan Party nor any Secured Party has any
liability or obligation to pay any fees or commissions to any broker, finder or agent with respect
to the transactions contemplated by this Agreement or the Settlement Agreements for which any party
hereto is or could become liable or obligated.
15. Miscellaneous.
(a) Except as otherwise expressly permitted by this Agreement, all notices, requests, and
other communications provided for herein (including, without limitation, any modifications of, or
waivers, requests or consents under this Agreement) shall be given or made in writing (including,
without limitation, by telex or telecopy) delivered to the intended recipient at the “Address for
Notices” as specified in the Legacy Credit Agreement or, as to any party, at such other address as
shall be designated by such party in a written notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
8
(b) Each Franklin Loan Party hereby agrees jointly and severally, to hold each Secured Party,
and each Affiliate thereof and the respective officers, directors, employees, agents, and advisors
of each
Secured Party (each an “Indemnified Party”) harmless from and indemnify the Secured
Parties and such other Persons against all liabilities, losses, damages, judgments, costs, and
expenses of any kind that may be imposed on, incurred by, or asserted against the Secured Parties
or such other Persons, relating to or arising out of, this Agreement, any other Settlement Document
or any transaction contemplated hereby or thereby, or any amendment, supplement, or modification
of, or any waiver or consent under or in respect of, this Agreement, any other Settlement Document,
or any transaction contemplated hereby or thereby, that, in each case, results from any matter
whatsoever, except to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of any Secured Party.
(c) This Agreement may not be amended or modified except in a writing signed by each of the
parties that execute this Agreement. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
(d) This Agreement may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart.
(e) This Agreement shall be governed by Ohio law without reference to choice of law doctrine.
(f) Each party hereby irrevocably and unconditionally: SUBMITS FOR ITSELF AND ITS PROPERTY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF OHIO, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF OHIO, AND APPELLATE COURTS FROM ANY THEREOF; CONSENTS THAT ANY SUCH
ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME; AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE WITHIN THE LEGACY
CREDIT AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE BEEN
NOTIFIED; AND AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
(g) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER SETTLEMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
9
(h) Each Franklin Loan Party hereby acknowledges that: (i) it has been advised by counsel in
the negotiation, execution, and delivery of this Agreement and the Settlement Documents; (ii)
no Secured Party has any fiduciary relationship to any Franklin Loan Party, and the relationship
between such Franklin Loan Party and each Secured Party is solely that of debtor and creditor; and
(iii) no joint venture exists among or between the any Secured Party and any such Franklin Loan
Party.
(i) The amendments and supplements set forth herein and in the Settlement Documents shall be
limited precisely as provided for herein, and shall not be deemed to be a waiver of, amendment of,
consent to or modification of any right of any Secured Party under, or of any other term or
provisions of any Loan Document, or of any term or provision of any other instrument referred to
therein or herein or of any transaction or future action on the part of any Franklin Loan Party
which would require the consent of any Secured Party.
(j) The Secured Parties each agree to hold any confidential information that it may receive from
any Franklin Loan Party in connection with this Agreement in confidence, except for disclosure (i)
to its Affiliates and to any other Secured Party and their respective Affiliates, (ii) to legal
counsel, accountants, and other professional advisors to any Secured Party, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law, regulation, or legal
process, (v) to any Person in connection with any legal proceeding to which it is a party, and (vi)
to its direct or indirect contractual counterparties in swap agreements or to legal counsel,
accountants, and other professional advisors to such counterparties; provided, however that in the
event that the Administrative Agent or any of its representatives are requested or required by
judicial, legislative or regulatory process to disclose any such confidential information, to the
extent that the Administrative Agent is permitted to do so under the pleadings, orders or
directives applicable to such judicial, legislative or regulatory process, the Administrative Agent
will provide Holding, as representative of each of the Franklin Loan Parties, with prompt notice of
any such request or requirement so that Holding may seek a protective order or other appropriate
remedy and/or waive compliance with the terms of this Agreement, and to such extent the
Administrative Agent agrees to reasonably cooperate with the Holding in its doing so. In the event
that such protective order or other remedy is not obtained, or that Holding waives compliance with
the terms hereof, the Administrative Agent may disclose only that portion of the confidential
information which is legally required. Each Franklin Loan Party agrees that the terms of this
Section 15(j) shall set forth the entire agreement among the parties hereto with respect to any
confidential information previously or hereafter received in connection with this Agreement, and
this Section shall supersede any and all prior confidentiality agreements entered into by any of
the parties hereto with respect to such confidential information, including, without limitations
any terms contained in any term sheet or summary of terms concerning the matters set forth in this
Agreement.
(k) The releases and waivers contained in this Agreement are freely, knowingly and voluntarily
given by each party, without any duress or coercion, after each party has had opportunity to
consult with its counsel and has carefully and completely read all of the terms and provisions of
this Agreement. This Agreement shall be deemed drafted by all parties hereto and shall be
construed without regard to any presumption or rule requiring that it be construed against the
party initiating the drafting thereof.
10
(l) Each Franklin Loan Party hereby agrees that if any such party, individually or jointly,
shall (i) file with any bankruptcy court of competent jurisdiction or be the subject of any
petition under the Bankruptcy Code, (ii) be the subject of any order for relief issued under the
Bankruptcy Code, (iii) file or be the subject of any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy, insolvency, or other relief
for debtors, (iv) seek consent to or acquiesce in the appointment of
any trustee, receiver, conservator, or liquidator, (v) be the subject of any order, judgment
or decree entered by any court of competent jurisdiction approving a petition filed against any
Franklin Loan Party for any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act or law relating to
bankruptcy and insolvency, or relief for debtors, the Secured Parties shall thereupon be entitled
to relief from any automatic stay imposed by Section 362 of the Bankruptcy Code, or from any other
stay or suspension of remedies imposed in any other manner with respect to the exercise of the
rights and remedies otherwise available to the Secured Parties under the terms of this Agreement
and the Notes and the Loan Documents. Each Franklin Loan Party agrees that upon the occurrence of
an Event of Default, the Administrative Agent shall be entitled to appointment of a receiver for
any Collateral.
(m) If any Secured Party receives any payments or proceeds of any Collateral, including,
without limitation, the REIT Collateral, or any payment made pursuant to any of the Legacy Credit
Agreement, the Licensing Credit Agreement, the Franklin Master Agreement or any agreement
evidencing the Static Loans, the Deferred Payment Agreement, this Agreement or any agreement
executed in connection with any of the foregoing, which are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be paid to a trustee, debtor-in-possession,
receiver or any other party under any bankruptcy law, common law, equitable cause or otherwise,
then, to such extent, the obligations or part thereof intended to be satisfied by the Debt
Reduction or any payments or proceeds of any Collateral shall be reserved and continue as if such
Debt Reduction, payments or proceeds had not been received by the applicable Secured Party.
(n) Each of the Secured Parties hereto hereby notifies each Franklin Loan Party that pursuant
to the requirements of the USA Patriot Act (Title III of Pub.L. 10756, signed into law October 26,
2001) (the “Act”), it is required to obtain, verify and record information that identifies
each Franklin Loan Party, which information includes the name and address of each party and other
information that will allow such Secured Parties to identify any Franklin Loan Party in accordance
with the Act.
[Signature Pages Follow]
11
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the date first set
forth above.
| FRANKLIN CREDIT ASSET CORPORATION | ||||||
| By: | /s/ Xxxxxx X. Xxxx | |||||
| Name: | Xxxxxx X. Xxxx | |||||
| Title: | President | |||||
| FRANKLIN ASSET, LLC | ||||||
| By: | /s/ Xxxxxx X. Xxxx | |||||
| Name: | Xxxxxx X. Xxxx | |||||
| Title: | President | |||||
| EACH OTHER BORROWER LISTED ON SCHEDULE 1 ATTACHED HERETO. | ||||||
| By: | /s/ Xxxxxx X. Xxxx | |||||
| Name: | Xxxxxx X. Xxxx | |||||
| Title: | President of each such Borrower | |||||
| FRANKLIN CREDIT HOLDING CORPORATION | ||||||
| By: | /s/ Xxxxxx X. Xxxx | |||||
| Name: | Xxxxxx X. Xxxx | |||||
| Title: | President | |||||
| FRANKLIN CREDIT MANAGEMENT CORPORATION | ||||||
| By: | /s/ Xxxxxx X. Xxxx | |||||
| Name: | Xxxxxx X. Xxxx | |||||
| Title: | President | |||||
Signature Page to Settlement Agreement
THE HUNTINGTON NATIONAL BANK, in its capacities as Administrative Agent and Lender under the Legacy
Credit Agreement, a party to the ISDA Agreements, and as Administrative Agent and issuing bank
under the Licensing Credit Agreement
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: | Xxxxx X. Xxxxxxx | |||||
| Title: | Senior Vice President | |||||
HUNTINGTON FINANCE LLC, as a Lender under the Legacy Credit Agreement and as Lender under the
Licensing Credit Agreement
| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxx | |||||
| Title: | President | |||||
M & I XXXXXXXX & XXXXXX BANK, as a Lender under the Legacy Credit Agreement and as a party to the
ISDA Agreements
| By: | /s/ Xxxxxx X. X’Xxxxx | |||||
| Name: | Xxxxxx X. X’Xxxxx | |||||
| Title: | Executive Vice President | |||||
Signature Page to Settlement Agreement
Exhibits and Schedules
Schedule 1 to Signature Page (Legacy Borrowers)
Schedule 3 (Schedule of Legacy Indebtedness after Debt Reduction)
Exhibit 2 (Stock Powers)
Exhibit 4 (Xxxxxx Xxxxxxxxx No. 3)
Exhibit 5 (Second Amendment to Pledge)
Exhibit 6 (Discharge of Limited Recourse Guaranty)
Exhibit 7 (Licensing Amendment No. 4)
Exhibit 9(b) (Other Closing Deliveries)
SCHEDULE 1 TO SIGNATURE PAGE
(Legacy Borrowers)
TRIBECA LENDING CORP. |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 A CORP. |
XXXX 0000 B CORP (fka Fort 100 Corporation) |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 A CORP. |
XXXX 0000 B CORP. |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 G CORP. |
XXXX 0000 H CORP. |
XXXX 0000 A CORP. |
XXXX 0000 B CORP. |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 G CORP. |
XXXX 0000 H CORP. |
XXXX 0000 I CORP. |
XXXX 0000 A CORP (fka XXXX 0000 J Corp.) |
XXXX 0000 B CORP. (fka XXXX 0000 K Corp.) |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 G CORP. |
XXXX 0000 H CORP. |
XXXX 0000 I CORP. |
XXXX 0000 J CORP. |
XXXX 0000 K CORP. |
XXXX 0000 L CORP. |
XXXX 0000 M CORP. |
XXXX 0000 A CORP. |
XXXX 0000 B CORP. |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 G CORP. |
XXXX 0000 H CORP. |
XXXX 0000 I CORP. |
FCMC B-ONE 2004 A CORP. |
FCMC B-ONE 2004 B CORP. |
FCMC B-ONE 2004 C CORP. |
FCMC B-ONE 2004 D CORP. |
FCMC B-ONE 2004 E CORP. |
FCMC B-ONE 2004 F CORP. |
FLOW 2000A CORP. |
FLOW 2000B CORP. |
FLOW 2000D CORP. |
FLOW 2000E CORP. |
FLOW 2000F CORP. |
FLOW 2001 A CORP. |
FLOW 2001 B CORPORATION |
FLOW 2001 C CORPORATION |
FLOW 2001 D CORP (fka Fort 100 B Corporation) |
FLOW 2001 E CORPORATION |
FLOW 2001 F CORPORATION |
FLOW 2001 G CORPORATION |
FLOW 2001 H CORP. |
FLOW 2001 I CORP. |
FLOW 2001 J CORP. |
FLOW 2001 K CORP |
FLOW 2001 L CORP. |
FLOW 2002 A CORP. |
FLOW 2002 B CORP. |
FLOW 2002 C CORP. |
FLOW 2002 D CORP. |
FLOW 2002 E CORP. |
FLOW 2002 F CORP. |
FLOW 2002 G CORP. |
FLOW 2002 H CORP. |
FLOW 2002 I CORP. |
FLOW 2002 J CORP. |
FLOW 2002 K CORP. |
FLOW 2002 L CORP. |
FLOW 2003 A CORP. |
FLOW 2003 B CORP. |
FLOW 2003 C CORP. |
FLOW 2003 D CORP. |
FLOW 2003 E CORP. |
FLOW 2003 F CORP. |
FLOW 2003 G CORP. |
FLOW 2003 H CORP. |
FLOW 2003 I CORP. |
FLOW 2003 J CORP. |
FLOW 2003 K CORP. |
FLOW 2003 L CORP. |
FLOW 2004 A CORP. (fka Flow 2003 M Corp.) |
FLOW 2004 B CORP. |
FLOW 2004 C CORP. |
FLOW 2004 D CORP. |
FLOW 2004 E CORP. |
FLOW 2004 F CORP. |
FLOW 2004 G CORP. |
FLOW 2004 H CORP. |
FLOW 2004 I CORP. |
FLOW 2005 A CORP. |
FLOW 2005 B CORP. |
FLOW 2005 C CORP. |
FLOW 2005 D CORP. |
FLOW 2005 E CORP. |
FLOW 2005 F CORP |
FLOW 2005 G CORP |
FLOW 2005 H CORP |
FLOW 2005 I CORP |
FLOW 2005 J CORP |
FLOW 99-92 CORP. |
CAPE 77 CORP. |
COAST 56 CORPORATION |
EMERGE 64 CORPORATION |
FIRSTGOLD 69 CORP. |
BEACH FUNDING CORP. |
COAST 96 CORP. |
EMOD 65 CORP. |
GREENWICH FIRST CORPORATION |
GREENWICH FUNDING CORPORATION |
GREENWICH MANAGEMENT CORPORATION |
XXXXXXXX FINANCIAL CORPORATION |
PANCAL 82 CORP. |
PENN 100B CORP. |
PENN 000 XXXX. |
XXXXX 00 XXXX. |
XXXXXX 87 CORP. |
XXXX 0000 J CORP. |
XXXX 0000 K CORP. |
XXXX 0000 L CORP. |
XXXX 0000 M CORP. |
XXXX 0000 N CORP. |
XXXX 0000 O CORP. |
XXXX 0000 P CORP. |
XXXX 0000 Q CORP. |
XXXX 0000 R CORP. |
XXXX 0000 S CORP. |
XXXX 0000 A CORP. |
XXXX 0000 B CORP. |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 G CORP. |
XXXX 0000 H CORP. |
XXXX 0000 I CORP. |
XXXX 0000 J CORP. |
XXXX 0000 L CORP. |
FCMC 2006 N CORP. |
XXXX 0000 O CORP. |
XXXX 0000 P CORP. |
XXXX 0000 Q CORP. |
XXXX 0000 R CORP. |
XXXX 0000 S CORP. |
XXXX 0000 T CORP. |
XXXX 0000 U CORP. |
XXXX 0000 V CORP. |
FCMC 2006 W CORP. |
XXXX 0000 X CORP. |
XXXX 0000 Y CORP. |
XXXX 0000 Z CORP. |
XXXX 0000 A CORP. |
XXXX 0000 B CORP. |
XXXX 0000 C CORP. |
XXXX 0000 D CORP. |
XXXX 0000 E CORP. |
XXXX 0000 F CORP. |
XXXX 0000 G CORP. |
XXXX 0000 H CORP. |
XXXX 0000 I CORP. |
XXXX 0000 J CORP. |
XXXX 0000 K CORP. |
XXXX 0000 L CORP. |
XXXX 0000 M CORP. |
XXXX 0000 N CORP |
XXXX 0000 O CORP. |
XXXX 0000 P CORP. |
XXXX 0000 Q CORP. |
XXXX 0000 R CORP. |
XXXX 0000 S CORP. |
XXXX 0000 T CORP. |
XXXX 0000 U CORP |
XXXX 0000 V CORP. |
FCMC 2007 W CORP. |
XXXX 0000 X CORP. |
XXXX 0000 Y CORP. |
XXXX 0000 Z CORP |
XXXX 0000 AA CORP. |
XXXX 0000 XX CORP. |
XXXX 0000 AC CORP. |
FLOW 2006 A CORP. |
FLOW 2006 B CORP. |
FLOW 2006 C CORP. |
FLOW 2006 D CORP. |
FLOW 2006 E CORP. |
FLOW 2006 G CORP. |
FLOW 2006 H CORP. |
FLOW 2007 A CORP. |
FLOW 2007 B CORP |
FLOW 2007 C CORP. |
FLOW 2007 D CORP. |
RONTEX CORPORATION |
SIX XXXXXXXX CORPORATION |
XXXXXXXX FIRST CORPORATION |
XXXXXXXX FINANCIAL ASSOCIATES, INC. |
XXXXXXXX FUNDING CORPORATION |
RONTEXT 1617 CORPORATION |
RONTEX 1617 CORPORATION |
JUNIPER CORP. |
NEWPORT 50 CORPORATION |
SIX XXXXXXXX CORPORATION |
XXXXXX MANAGEMENT CORPORATION |
TRIBECA FUNDING CORPORATION |
TRIBECA L 2005 CORP. |
TRIBECA LII 2005 CORP. |
TRIBECA LIII 2005 CORP. |
TRIBECA LIV 2005 CORP. |
TRIBECA LIX 2006 CORP. |
TRIBECA LV 2005 CORP. |
TRIBECA LVI 2005 CORP. |
TRIBECA LVII 2006 CORP. |
TRIBECA LVIII 2006 CORP. |
TRIBECA LX 2006 CORP. |
TRIBECA LXI 2006 CORP. |
TRIBECA LXII 2006 CORP. |
TRIBECA LXIII 2006 CORP. |
TRIBECA LXIV 2006 CORP. |
TRIBECA LXIX 2006 CORP. |
TRIBECA LXV 2006 CORP. |
TRIBECA LXVI 2006 CORP. |
TRIBECA LXVII 2006 CORP. |
TRIBECA LXVIII 2006 CORP. |
TRIBECA LXX 2006 CORP. |
TRIBECA LXXI 2006 CORP. |
TRIBECA LXXII 2006 CORP. |
TRIBECA LXXIII 2006 CORP. |
TRIBECA LXXIV 2006 CORP. |
TRIBECA LXXIX 2007 CORP. |
TRIBECA LXXV 2006 CORP. |
TRIBECA LXXVI 2006 CORP. |
TRIBECA LXXVII 2006 CORP. |
TRIBECA LXXVIII 2006 CORP. |
TRIBECA LXXX 2007 CORP. |
TRIBECA LXXXI 2007 CORP. |
TRIBECA LXXXII 2007 CORP. |
TRIBECA LXXXIII 2007 CORP. |
TRIBECA LXXXIV 2007 CORP. |
TRIBECA LXXXIX 2007 CORP. |
TRIBECA LXXXV 2007 CORP. |
TRIBECA LXXXVI 2007 CORP. |
TRIBECA LXXXVII 2007 CORP. |
TRIBECA LXXXVIII 2007 CORP. |
TRIBECA XC 2007 CORP. |
TRIBECA XCI 2007 CORP. |
TRIBECA XCII 2007 CORP. |
TRIBECA XCIII 2007 CORP. |
TRIBECA XCIV 2007 CORP. |
TRIBECA XCV 2007 CORP. |
TRIBECA XIX 2004 CORP. |
TRIBECA XV 2004 CORP. |
|
TRIBECA XVII 2004 CORP. |
|
TRIBECA XVIII 2004 CORP. |
|
TRIBECA XX 2004 CORP. |
|
TRIBECA XXI 2004 CORP. |
|
TRIBECA XXII 2004 CORP. |
|
TRIBECA XXIII 2004 CORP. |
|
TRIBECA XXIV 2004 CORP. |
|
TRIBECA XXIX 2005 CORP. |
|
TRIBECA XXV 2004 CORP. |
|
TRIBECA XXVI 2004 CORP. |
|
TRIBECA XXVII 2004 CORP. |
|
TRIBECA XXVIII 2004 CORP. |
|
TRIBECA XXX 2005 CORP. |
|
TRIBECA XXXI 2005 CORP. |
|
TRIBECA XXXII 2005 CORP. |
|
TRIBECA XXXIII 2005 CORP. |
|
TRIBECA XXXIV 2005 CORP. |
|
TRIBECA XXXIX 2005 CORP. |
|
TRIBECA XXXV 2005 CORP. |
|
TRIBECA XXXVI 2005 CORP. |
|
TRIBECA XXXVII 2005 CORP. |
|
TRIBECA XXXVIII 2005 CORP. |
|
TRIBECA XXXX 2005 CORP. |
|
TRIBECA XXXXI 2005 CORP. |
|
TRIBECA XXXXII 2005 CORP. |
|
TRIBECA XXXXIII 2005 CORP. |
|
TRIBECA XXXXIV 2005 CORP. |
|
TRIBECA XXXXIX 2005 CORP. |
|
TRIBECA XXXXV 2005 CORP. |
|
TRIBECA XXXXVI 2005 CORP. |
|
TRIBECA XXXXVII 2005 CORP. |
|
TRIBECA XXXXVIII 2005 CORP. |
|
TRIBECA LI 2005 CORP. |
|
TRIBECA XVI 2004 CORP. |
|
FLOW 2007 E CORP |
|
EMGOLD 57 CORP. |
|
FCMC CORPORATE REFINANCE |
Schedule 3 to Settlement Agreement
Franklin Credit Asset Corporation, et. al. Commercial Loans
Outstanding Principal Balance after Debt Reduction
23-May-11
Franklin Credit Asset Corporation, et. al. Commercial Loans
Outstanding Principal Balance after Debt Reduction
23-May-11
| Total | ||||||||||||||||||||||||||
| Note | HNB | Htg Finance | M&I | BOS | Total | by Tranche | ||||||||||||||||||||
Tranche |
A-1 | — | n/a | — | — | — | ||||||||||||||||||||
Tranche |
A-2 | — | n/a | — | — | — | ||||||||||||||||||||
Tranche |
A-3 | — | n/a | 4,989,206.27 | 4,962,727.93 | 9,951,934.20 | ||||||||||||||||||||
Tranche |
A-4 | 127,501,533.09 | n/a | 26,182,525.77 | 9,206,358.28 | 162,890,417.14 | 172,842,351.34 | |||||||||||||||||||
Tranche |
B-1 | 361,940,385.34 | 45,757,091.96 | n/a | 407,697,477.30 | |||||||||||||||||||||
Tranche |
B-2 | n/a | 26,647,640.57 | n/a | 26,647,640.57 | 434,345,117.87 | ||||||||||||||||||||
Tranche |
C | 159,829,057.56 | 11,256,396.36 | n/a | 171,085,453.92 | 171,085,453.92 | ||||||||||||||||||||
Total |
127,501,533.09 | 521,769,442.90 | 114,832,860.93 | 14,169,086.21 | 778,272,923.13 | 778,272,923.13 | ||||||||||||||||||||
| 1) | Reflects a $478 million debt reduction to HNB’s A tranche outstanding principal balance |
EXHIBIT 2
STOCK POWER
For Value Received, the undersigned, Franklin Asset, LLC hereby assigns and transfers
154 shares of Common Stock, without par value per share, of Huntington Preferred Capital II, Inc.,
an Ohio corporation (the “Corporation”), standing in its name on the books of the Corporation and
represented by Certificate Number 5, which is tendered herewith, to The Huntington National Bank,
and hereby irrevocably constitutes and appoints Porter, Wright, Xxxxxx & Xxxxxx LLP as its
attorney-in-fact to transfer said shares on the books of the Corporation, with full power of
substitution in the premises.
| Dated: May , 2011 | FRANKLIN ASSET, LLC |
|||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
STOCK POWER
For Value Received, the undersigned, Franklin Asset, LLC hereby assigns and transfers
4,724.1330831 shares of Class C Preferred Stock, $100,000 par value per share, of Huntington
Preferred Capital II, Inc., an Ohio corporation (the “Corporation”), standing in its name on the
books of the Corporation and represented by Certificate Number C-1, which is tendered herewith, to
The Huntington National Bank, and hereby irrevocably constitutes and appoints Porter, Wright,
Xxxxxx & Xxxxxx LLP as its attorney-in-fact to transfer said shares on the books of the
Corporation, with full power of substitution in the premises.
| Dated: May , 2011 | FRANKLIN ASSET, LLC |
|||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
EXHIBIT 4
AMENDMENT NO. 3 TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is entered
into as of this 23rd day of May, 2011 (the “Amendment Effective Date”), by and among
FRANKLIN CREDIT ASSET CORPORATION, a Delaware Corporation (“Franklin Asset”), TRIBECA LENDING
CORP., a New York corporation (“Tribeca”), Franklin Asset, LLC, a Delaware limited liability
company (“FCAC Subco”) and the other Borrowers listed on Schedule 1 hereto (together with
Franklin Asset, Tribeca and FCAC Subco, each, a “Borrower” and collectively, the “Borrowers”), the
FINANCIAL INSTITUTIONS SIGNATORY HERETO as Lenders (as defined in the Credit Agreement defined
below), and THE HUNTINGTON NATIONAL BANK, a national banking association (“Huntington”) as
administrative agent for the Lenders, in such capacity, and together with its successors and
assigns in such capacity, the “Administrative Agent”).
This Amendment further amends and modifies a certain Amended and Restated Credit Agreement
dated as of March 31, 2009 (as amended, supplemented, restated, or otherwise modified from time to
time prior to the date hereof, the “Credit Agreement”) by and among the Borrowers, the Lenders and
the Administrative Agent. Capitalized terms used in this Amendment and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
RECITALS:
A. As of March 31, 2009, the Borrowers, the Lenders and the Administrative Agent executed the
Credit Agreement, amending and restating the terms of certain extensions of credit to the Borrowers
and reaffirming all Loan Documents entered into or delivered prior to such date; and
B. The Borrowers have failed to make certain payments due and owing under one or more Interest
Rate Hedge Agreements entered into in connection with the Indebtedness evidenced by the Credit
Agreement (the “Specified Default”), the Administrative Agent has maintained that, as a result of
the Specified Default, the Borrowers are currently in default of Section 8.01(b), “Events of
Default” of the Credit Agreement, and the Borrowers have not agreed that the Specified Default
constitutes such a default under the Credit Agreement; and
C. As a result of the Specified Default, the Borrowers, the Administrative Agent, and the
Required Lenders, among others, entered into a Settlement Agreement dated as of May 23, 2011 (the
“Settlement Agreement”), pursuant to which, inter alia, the Borrowers agreed to transfer, assign
and surrender to Huntington as Lender the REIT Shares and all proceeds thereof in consideration for
$478,000,000, in reduction of indebtedness owed to Huntington pursuant to Tranche A, and, at the
request of the Borrowers, the Administrative Agent and the Required Lenders agreed to waive the
Specified Default and amend the terms and conditions of the Credit
Agreement as set forth below.
D. In connection with the Settlement Agreement, the Borrowers and Holding have requested that
(i) the Administrative Agent and the Required Lenders discharge Holding from any liability under
the Holding Limited Recourse Guaranty, (ii) waive the Specified Default; (iii) consent to the
Franklin Servicing LLC Dissolution to the extent it is prohibited by any of the Loan Documents,
(iv) consent to any Restricted Payment by Franklin Servicing LLC to Holding in connection with the
Franklin Servicing LLC Dissolution, (v) release its equity interests in Franklin Servicing LLC and
(vi) amend and modify certain other terms and covenants in the Credit Agreement, and the
Administrative Agent and the Required Lenders are willing to do so upon the terms and subject to
the conditions contained herein; and
E. Pursuant to Section 10.04, “Amendments,” of the Credit Agreement, the amendments
and waivers requested by the Borrowers and Holding herein must be contained in a written agreement
signed by each Borrower, the Administrative Agent and the Required Lenders.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereto for themselves and their successors and assigns do hereby agree,
represent and warrant as follows:
1. The definition of “Guarantor” set forth in Section 1.01, “Certain Defined
Terms,” of the Credit Agreement is hereby amended to recite as follows:
“Guarantor” shall mean any Person which has become obligated to the
Administrative Agent or the Lenders in respect of the Obligations under any
Loan Document pursuant to the terms of a Guarantee.
2. Section 7.08, “Activities of Franklin Servicing,” of the Credit Agreement is hereby
deleted in its entirety. In furtherance thereof, pursuant to the terms of the Settlement
Agreement, the Administrative Agent and the Required Lenders consent to (i) the dissolution of
Franklin Credit Loan Servicing LLC and the distribution of its remaining assets to Holding, and/or
(ii) the merger of such limited liability company into Holding, and further consent to the release
of the Lien of the Administrative Agent on the Equity Interests owned by Holding in Franklin Credit
Loan Servicing LLC and the making of any Restricted Payment from Franklin Credit Loan Servicing LLC
to Holding.
3. Paragraph (c) of Section 7.20, “ Organizational Documents, Pledge or Transfer of Equity
Interests,” of the Credit Agreement is hereby amended to recite as follows:
(c) No Borrower will permit or allow others to, create, incur or permit to
exist any Lien, security interest or claim on or to any Equity Interests of
Franklin Asset or Tribeca, other than a Lien securing the Obligations.
4. The Administrative Agent and the Required Lenders hereby waive the Specified Default.
5. Conditions of Effectiveness. This Amendment shall become effective as of the
Amendment Effective Date, upon satisfaction of all of the following conditions precedent:
(a) The Administrative Agent shall have received execution and delivery of, by all
parties signatory thereto, originals, or completion as the case may be, to the satisfaction
of the Lender and its counsel, containing such information requested by the Administrative
Agent and its counsel and reflecting the absence of any material fact or issues and in all
respect satisfactory to the Lender, each of the following Loan Documents:
(i) five (5) duly executed originals of this Amendment;
(ii) Holding shall deliver a certified “stand alone” balance sheet of Franklin
Servicing LLC dated as of December 31, 2010;
(iii) a duly executed original of the Second Amendment to Amended and Restated
Pledge Agreement of Holding to remove Franklin Servicing LLC from Schedule 2
(Pledged Collateral);
(iv) five (5) duly executed originals of the Settlement Agreement; and
(v) satisfactory evidence that all corporate and other proceedings that are
necessary in connection with this Amendment have been taken to the satisfaction of
the Administrative Agent and its counsel, and the Administrative Agent and such
counsel shall have received all such counterpart originals or certified copies of
such documents as the Administrative Agent may request.
(b) The Administrative Agent (for the benefit of the Lenders) shall have
received a fee in respect of this Amendment in the amount of $0, which fee shall be earned
in full as of the Amendment Effective Date and shall be non-refundable; and
(c) The representations contained in the immediately following paragraph shall be true
and accurate in all material respects.
6. Representations and Warranties. Each Borrower represents and warrants to the
Administrative Agent and each Lender as follows: (a) the execution, delivery and performance by
such Borrower of this Amendment and each other Loan Document have been duly authorized by all
requisite corporate or organizational action on the part of such Borrower and will not violate any
Requirement of Law applicable to each Borrower; and (b) this Amendment has been duly executed and
delivered by each Borrower, and each of this Amendment, the Credit Agreement and each other Loan
Document as amended hereby constitutes the legal, valid and binding obligation of each Borrower,
enforceable against such Borrower in accordance with the terms thereof.
7. Ratification and Reaffirmation. Each Borrower agrees that the Liens and security
interests granted to the Administrative Agent with respect to the Obligations as security for all
obligations and liabilities of such Borrower under the Credit Agreement, each Application and
Agreement for Letter of Credit and the Revolving Loan Note are valid and binding and are hereby
ratified and confirmed in all respects.
8. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to “Amended and Restated Credit Agreement,”
“Credit Agreement,” “Agreement,” the prefix “herein,” “hereof,” or words of similar import, and
each reference in the Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby. (b) Except to the extent amended or modified hereby, all of
the representations, warranties, terms, covenants and conditions of the Credit Agreement and the
other Loan Documents shall remain as written originally and in full force and effect in accordance
with their respective terms and are hereby ratified and confirmed, and nothing herein shall affect,
modify, limit or impair any of the rights and powers that the Administrative Agent may have
hereunder or thereunder. Nothing in this Amendment shall constitute a novation. The amendments
set forth herein shall be limited precisely as provided for herein, and shall not be deemed to be a
waiver of, amendment of, consent to or modification of any of the Administrative Agent’s or any
Lender’s rights under, or of any other term or provisions of, the Credit Agreement or any other
Loan Document, or of any term or provision of any other instrument referred to therein or herein or
of any transaction or future action on the part of any Borrower that would require the consent of
the Lender.
9. No Waiver. Nothing in this Amendment shall be construed to waive, modify, or cure
any default or Event of Default that exists or may exist under the Credit Agreement or any other
Loan Document.
10. Waiver of Right to Trial by Jury. EACH PARTY TO THIS AMENDMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER
THIS AMENDMENT OR ANY LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND EACH PARTY HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY
COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11. Counterparts. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, and all of which together will constitute one and the same
instrument. Receipt by the Administrative Agent of a facsimile copy of an executed signature page
hereof will constitute receipt by the Administrative Agent of an executed counterpart of this
Amendment.
12. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the laws of the
State of Ohio.
13. Headings. Section headings in this Amendment are included herein for convenience
of reference only and will not constitute a part of this Amendment for any other purpose.
14. Patriot Act Notice. The Administrative Agent hereby notifies each Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub.L.10756 (signed into law
October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of each Borrower and
other information that will allow the Administrative Agent to identify each Borrower in accordance
with the Act.
[Signature Pages Follow.]
IN WITNESS WHEREOF, the Borrowers, the Administrative Agent and the Lenders signatory hereto
have set their hands as of the date first set forth above.
| BORROWERS: FRANKLIN CREDIT ASSET CORPORATION |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
| TRIBECA LENDING CORP. |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
| FRANKLIN ASSET, LLC |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
| EACH BORROWER LISTED ON SCHEDULE 1 ATTACHED HERETO |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | as President of, and on behalf of, each Borrower listed on Schedule 1 attached to this Amendment. | |||
| ADMINISTRATIVE AGENT: THE HUNTINGTON NATIONAL BANK |
||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
| LENDERS: THE HUNTINGTON NATIONAL BANK |
||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
| HUNTINGTON FINANCE LLC, as Lender |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | President | |||
| M & I XXXXXXXX & ILSLEY BANK, as Lender |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT 5
SECOND AMENDMENT TO
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED PLEDGE AGREEMENT (this “Amendment”), dated as of
May 23, 2011, is entered into by and between FRANKLIN CREDIT HOLDING CORPORATION, a Delaware
corporation (the “Grantor”), and The Huntington National Bank, a national banking association,
acting hereunder as contractual representative pursuant to the Credit Agreement for Lenders
(“Huntington,” acting as such contractual representative and any successor or successors to
Huntington acting in such capacity, being referred to as the “Administrative Agent”). All
capitalized terms in this Amendment that are not otherwise defined herein shall have the meanings
ascribed to such terms in the Pledge Agreement (as defined below).
RECITALS:
A. On or about March 31, 2009, the Grantor entered into a certain Amended and Restated Pledge
Agreement, that has been amended by a certain First Amendment to Amended and Restated Pledge
Agreement dated September 22, 2010 (as so amended, the “Pledge Agreement”) in favor of
Administrative Agent; and
B. Pursuant to the terms and subject to the conditions of the Pledge Agreement, the Grantor
collaterally assigned, mortgaged, pledged, and hypothecated to Administrative Agent (for the
benefit of the Secured Creditors) a lien on and security interest in, and a collateral assignment
of, all of Grantor’s right, title, and interest in, to, and under the Collateral; and
C. The Grantor and the Administrative Agent have agreed that the Pledge Agreement should be
amended and modified upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, and promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereto for themselves and their successors and assigns do hereby agree,
represent and warrant as follows:
15. The definition of “Pledged LLC Interests,” as set forth in Section 1.1(b) of the Pledge
Agreement is hereby amended to recite in its entirety as follows:
“Pledged LLC Interests” means, other in respect to Franklin Credit Loan
Servicing, LLC, all right, title and interest of the Grantor as a member of
any LLC and all right, title and interest of the Grantor in, to and under
any LLC Agreement to which it is a party.
16. Schedule 2 to the Pledge Agreement is hereby replaced with Schedule 2 attached to this
Amendment.
17. Conditions of Effectiveness. This Amendment shall become effective as of May
23, 2011, upon satisfaction of all of the following conditions precedent:
(a) Administrative Agent shall have received execution and delivery of, by all parties
signatory thereto, originals, or completion as the case may be, to the satisfaction of
Administrative Agent and its counsel, containing such information requested by Administrative
Agent and its counsel and reflecting the absence of any material fact or issues and in all
respect satisfactory to the Administrative Agent, each of the following documents:
(i) Two duly executed originals of this Amendment;
(b) The representations contained in the immediately following paragraph shall be true and
accurate.
18. Representations and Warranties. The Grantor represents and warrants to
Administrative Agent as follows: (a) after giving effect to this Amendment, each representation and
warranty made by or on behalf of the Grantor in the Pledge Agreement and in any other document
executed in connection therewith is true and correct in all material respects on and as of the date
hereof as though made on and as of such date, except to the extent that any such representation or
warranty expressly relates solely to a date prior hereto; (b) the execution, delivery, and
performance by the Grantor of this Amendment and any other related document have been duly
authorized by all requisite corporate or organizational action on the part of the Grantor and will
not violate any Laws applicable to the Grantor; (c) this Amendment has been duly executed and
delivered by the Grantor, and each of this Amendment, the Pledge Agreement, and any other related
document as amended hereby constitutes the legal, valid, and binding obligation of the Grantor,
enforceable against the Grantor in accordance with the terms thereof; and (d) no event has occurred
and is continuing, and no condition exists, which would constitute an Event of Default.
19. Ratification and Reaffirmation. The Grantor agrees (i) that all the obligations,
indebtedness, and liabilities of the Grantor to the Administrative Agent under the Pledge Agreement
are the valid and binding obligations of the Grantor; (ii) that the Secured Obligations of the
Grantor are valid and binding without any present right of offset, claim, defense, or recoupment of
any kind and are hereby ratified and confirmed in all respects; and (iii) that the Liens and
security interests granted to the Administrative Agent are valid and binding and are hereby
ratified and confirmed in all respects.
20. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of this
Amendment, each reference in the Pledge Agreement to “Amended and Restated Pledge Agreement,”
“Pledge Agreement,” “Agreement,” the prefix “herein,” “hereof,” or words of similar import, and
each reference in any related documents to the Pledge Agreement, shall mean and be a reference to
the Pledge Agreement as amended hereby. (b) Except to the extent amended or modified hereby, all
of the representations, warranties, terms, covenants, and conditions of the Pledge Agreement and
any related documents shall remain as written originally and in full force and effect in accordance
with their respective terms and are hereby ratified and confirmed, and nothing herein shall affect,
modify, limit, or impair any of the rights and powers which the Administrative Agent may have
hereunder or thereunder. Nothing in this Amendment shall constitute a novation. The amendments
set forth herein shall be limited precisely as provided for herein, and shall not be deemed to be a
waiver of, amendment of, consent to, or modification of any of the Administrative Agent’s rights
under, or of any other term or provisions of, the Pledge Agreement or any other related document,
or of any term or provision of any other document referred to therein or herein or of any
transaction or future action on the part of the Grantor that would require the consent of the
Administrative Agent.
21. No Waiver. Nothing in this Amendment shall be construed to waive, modify, or cure
any default or Event of Default that exists or may exist under the Credit Agreement or any other
Loan Document.
22. Waiver of Right to Trial by Jury. EACH PARTY TO THIS AMENDMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (1) ARISING
UNDER THIS AMENDMENT OR ANY LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT OR
ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
23. Counterparts. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and delivered
shall be an original, and all of which together will constitute one and the same instrument.
Receipt by the Administrative Agent of a facsimile copy of an executed signature page hereof will
constitute receipt by the Administrative Agent of an executed counterpart of this Amendment.
24. Further Assurances. The Grantor hereby agrees to execute and deliver such
additional documents, instruments, and agreements reasonably requested by the Administrative Agent
as may be reasonably necessary or appropriate to effectuate the purposes of this Amendment.
25. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the laws of the
State of Ohio.
26. Headings. Section headings in this Amendment are included herein for convenience
of reference only and will not constitute a part of this Amendment for any other purpose.
[Signature Page Follows.]
IN WITNESS WHEREOF, the Grantor and the Administrative Agent have hereunto set their hands as
of the date first set forth above.
| GRANTOR: FRANKLIN CREDIT HOLDING CORPORATION |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
| ADMINISTRATIVE AGENT: THE HUNTINGTON NATIONAL BANK, as Administrative Agent |
||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
SCHEDULE 2
(Pledged Collateral)
100% of issued and outstanding equity of all classes of stock and membership interests of
subsidiaries of Franklin Credit Holding Corporation, including but not limited to, Franklin Credit
Asset Corporation and Tribeca Lending Corp., but excluding Franklin Credit Management Corporation
and Franklin Credit Loan Servicing, LLC.
EXHIBIT 6
DISCHARGE OF LIMITED RECOURSE GUARANTY
FRANKLIN CREDIT HOLDING CORPORATION
FRANKLIN CREDIT HOLDING CORPORATION
WHEREAS, FRANKLIN CREDIT HOLDING CORPORATION (“Holding”), entered into a Limited Recourse
Guaranty dated March 31, 2009 (the “Guaranty”), with THE HUNTINGTON NATIONAL BANK, as
administrative agent (in such capacity, the “Administrative Agent”) for the Lenders defined below,
pursuant to which Holding guaranteed, on a limited recourse basis, the payment of the obligations
of Franklin Credit Asset Corporation, Tribeca Lending Corp. and their Subsidiaries as borrowers
(collectively the “Borrowers”), under a certain Amended and Restated Credit Agreement by and among
the Borrowers, the financial institutions party thereto from time to time as lenders (collectively,
the “Lenders”), and the Administrative Agent, dated as of March 31, 2009, as amended, restated,
supplemented and otherwise modified from time to time prior to the date hereof, the “Credit
Agreement”, and various promissory notes executed in connection with the Credit Agreement;
WHEREAS, in connection with the Credit Agreement, Holding executed and delivered a certain a
certain Amended and Restated Pledge Agreement, as amended prior to the date hereof by a certain
First Amendment to Amended and Restated Pledge Agreement dated September 22, 2010 (as so amended,
the “Pledge Agreement”) in favor of Administrative Agent; and
WHEREAS, the Borrowers have requested that the Administrative Agent discharge the Guaranty,
and the Administrative Agent, with the consent of the requisite Lenders under the Credit Agreement,
is willing to do so as long as Holding reaffirms each warranty, representation, covenant and
agreement contained in, and its obligations under, a Pledge Agreement (other than as it relates to
the Guaranty).
NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereto for themselves and their successors and assigns do hereby agree,
represent and warrant as follows:
1. The Administrative Agent does hereby release, cancel and discharge Holding from all of its
duties and obligations to the Administrative Agent and the Lenders under the Guaranty, and the
Guaranty is hereby released, cancelled and discharged.
2. Except as any warranty, representation, covenant and agreement relates to the continuing
enforceability of the Guaranty, Holding hereby (i) reaffirms each warranty, representation,
covenant and agreement made by Holding to the Administrative Agent and the Lenders in the Pledge
Agreement, and (ii) agrees that its rights and obligations shall be continuing as provided in the
Pledge Agreement and that the Pledge Agreement shall remain as written originally and continue in
full force and effect in all respects.
IN WITNESS WHEREOF, each of the Administrative Agent and Holding have caused this instrument
to be executed and delivered by its duly authorized officer as of the
_____
day of May, 2011.
| THE HUNTINGTON NATIONAL BANK, as Administrative Agent |
||||
| By: | ||||
| Xxxxx X. Xxxxxxx, Senior Vice President | ||||
| FRANKLIN CREDIT HOLDING CORPORATION | ||||
| By: | ||||
| Xxxxxx X. Xxxx, President | ||||
EXHIBIT 7
AMENDMENT NO. 4 TO
AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)
AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING)
THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT (LICENSING) (this “Amendment”)
is entered into as of May 23, 2011 (the “Amendment Effective Date”), by and among FRANKLIN CREDIT
MANAGEMENT CORPORATION, a Delaware Corporation, and FRANKLIN CREDIT HOLDING CORPORATION, a Delaware
corporation (each, a “Borrower” and collectively “Borrowers”), THE FINANCIAL INSTITUTIONS PARTY
HERETO AS LENDERS (each, a “Lender” and collectively, the “Lenders”) and THE HUNTINGTON NATIONAL
BANK, a national banking association (“Huntington”), as administrative agent for the Lenders (in
such capacity, together with its successors and assigns in such capacity, the “Administrative
Agent”). This Amendment further amends and modifies a certain Amended and Restated Credit
Agreement (Licensing) dated as of March 31, 2009 (as amended, supplemented, restated or otherwise
modified from time to time prior to the date hereof, the “Credit Agreement”) by and among
Borrowers, the Lenders, the Administrative Agent and Issuing Bank. Capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.
RECITALS:
A. As of March 31, 2009, Borrowers, the Lenders, the Administrative Agent and Issuing Bank
executed the Credit Agreement setting forth the terms of certain extensions of credit to the
Borrower; and
B. As of March 31, 2009, Borrowers executed and delivered to the Administrative Agent, inter
alia, a Revolving Promissory Note (Licensing) in the original principal sum of Two Million Dollars
($2,000,000), which principal sum was thereafter reduced to One Million Dollars ($1,000,000); and
C. As of March 31, 2009, and at various other times, Borrowers executed and delivered to the
Administrative Agent, inter alia, one or more Applications and Agreements for Letter of Credit in
connection with Issuing Bank’s issuance of Letters of Credit for the account of one or more of the
Borrowers; and
D. As of May 31, 2010, the Draw Loan Commitment expired by its terms and Borrowers have no
right to obtain any Draw Loan Advances under the Credit Agreement;
E. As of March 28, 2011, the Administrative Agent, on behalf of the Lenders and the Issuing
Bank, waived the Borrowers’ failure to comply with Section 7.07(a) (Net Income Before Taxes)
through and including September 30, 2011; and
E. As of even date herewith, the Borrowers, the Lenders and the Administrative Agent, among
others, have entered into a certain Settlement Agreement (the “Settlement Agreement”), and, in
connection therewith, the Borrowers have requested that the Administrative Agent and the Lenders
(i) extend the maturity of the Revolving Loan Commitment and the Letter of Credit Commitment and
(ii) delete the certain financial covenant in Section 7.07(a) (Net Income Before Taxes) of the
Credit Agreement, and the Administrative Agent, the Lenders and the Issuing Bank, are willing to do
so upon the terms and subject to the conditions contained herein; and
F. Pursuant to Section 10.04, “Amendments,” of the Credit Agreement, the amendments
requested by the Borrowers and Holding herein must be contained in a written agreement signed by
each Borrower, the Administrative Agent and the Required Lenders.
NOW, THEREFORE, in consideration of the mutual covenants, agreements and promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereto for themselves and their successors and assigns do hereby agree,
represent and warrant as follows:
27. The definition of “Termination Date” set forth in Section 1.01, “Certain
Defined Terms,” of the Credit Agreement is hereby amended to recite as follows:
“Termination Date” shall mean (i) in respect of the Revolving Loan
and the Revolving Loan Commitment and the Letters of Credit and the Letter
of Credit Commitment, September 30, 2012, or such earlier date on which this
Agreement shall terminate in accordance with the provisions hereof or by
operation of law, and (ii) in respect of the Draw Loan and the Draw Loan
Commitment May 31, 2010, which Draw Loan and Draw Commitment have expired
and are of no force and effect.
28. Paragraph (a), “Net Income Before Taxes,” of Section 7.07, “Financial
Covenants,” of the Credit Agreement is hereby amended to recite as follows:
(a) [Intentionally Deleted].
29. Conditions of Effectiveness. This Amendment shall become effective as of the
Amendment Effective Date, upon satisfaction of all of the following conditions precedent:
(a) The Administrative Agent shall have received execution and delivery of, by all
parties signatory hereto, originals, or completion as the case may be, to the satisfaction
of the Administrative Agent and its counsel, of three duly executed originals of this
Amendment;
(b) Satisfactory evidence that all corporate and other proceedings that are necessary
in connection with this Amendment have been taken to the satisfaction of the
Administrative Agent and its counsel, and the Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such documents as
the Administrative Agent may request;
(c) The Administrative Agent (for the benefit of the Lenders) shall have received a fee
in respect of this Amendment in the amount of $18,750, which fee shall be earned in full as
of the Amendment Effective Date and shall be non-refundable;
(d) The Borrowers shall have paid all of the Administrative Agent’s cost and expenses
incurred up to the date of this Amendment; and
(e) The representations contained in the immediately following paragraph shall be true
and accurate.
30. Representations and Warranties. Each Borrower represents and warrants to the
Administrative Agent and each Lender as follows: (a) after giving effect to this Amendment, each
representation and warranty made by or on behalf of such Borrower in the Credit Agreement and in
any other Loan Document is true and correct in all material respects on and as of the date hereof
as though made on and as of such date, except to the extent that any such representation or
warranty expressly relates solely to a date prior hereto; (b) the execution, delivery and
performance by such Borrower of this Amendment and each other Loan Document have been duly
authorized by all requisite corporate or organizational action on the part of such Borrower and
will not violate any Requirement of Law applicable to each Borrower; (c) this Amendment has been
duly executed and delivered by each Borrower, and each of this Amendment, the Credit Agreement and
each other Loan Document as amended hereby constitutes the legal, valid and binding obligation of
each Borrower, enforceable against such Borrower in accordance with the terms thereof; and (d) no
event has occurred and is continuing, and no condition exists, which would constitute an Event of
Default or a Default.
31. Ratification and Reaffirmation. Each Borrower agrees (i) that all the
obligations, indebtedness and liabilities of such Borrower to the Administrative Agent and the
Lenders under the Credit Agreement are the valid and binding obligations of such Borrower; (ii)
that the obligations, indebtedness and liabilities of such Borrower evidenced by each Note executed
and delivered by such Borrower are valid and binding without any present right of offset, claim,
defense or recoupment of any kind and are hereby ratified and confirmed in all respects; and (iii)
that the Liens and security interests granted to the Administrative Agent with respect to the
Obligations as security for all obligations and liabilities of such Borrower under the Credit
Agreement, each Application and Agreement for Letter of Credit and the Revolving Loan Note are
valid and binding and are hereby ratified and confirmed in all respects.
32. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness of this
Amendment, each reference in the Credit Agreement to “Amended and Restated Credit Agreement
(Licensing),” “Credit Agreement,” “Agreement,” the prefix “herein,” “hereof,” or words of similar
import, and each reference in the Loan Documents to the Credit Agreement,
shall mean and be a reference to the Credit Agreement as amended hereby. (b) Except to the
extent amended or modified hereby, all of the representations, warranties, terms, covenants and
conditions of the Credit Agreement and the other Loan Documents shall remain as written originally
and in full force and effect in accordance with their respective terms and are hereby ratified and
confirmed, and nothing herein shall affect, modify, limit or impair any of the rights and powers
which the Administrative Agent may have hereunder or thereunder. Nothing in this Amendment shall
constitute a novation. The amendments set forth herein shall be limited precisely as provided for
herein, and shall not be deemed to be a waiver of, amendment of, consent to or modification of any
of the Administrative Agent’s or any Lender’s rights under, or of any other term or provisions of,
the Credit Agreement or any other Loan Document, or of any term or provision of any other
instrument referred to therein or herein or of any transaction or future action on the part of any
Borrower which would require the consent of the Lender.
33. Waiver and Release of All Claims and Defenses. Each Borrower hereby forever
waives, relinquishes, discharges and releases all defenses and claims of every kind or nature,
whether existing by virtue of state, federal, or local law, by agreement or otherwise, against the
Administrative Agent and the Lenders, and all of their successors, assigns, directors, officers,
shareholders, agents, employees and attorneys, the Obligations or the Collateral, whether
previously or now existing or arising out of or related to any transaction or dealings between the
Administrative Agent, any Lender and any Borrower or any of them, which any Borrower may have or
may have made at any time up through and including the date of this Amendment, including without
limitation, any affirmative defenses, counterclaims, setoffs, deductions or recoupments, by any
Borrower, and all of their representatives, successors, assigns, agents, employees, officers,
directors and heirs. “Claims” includes all debts, demands, actions, causes of action, suits,
dues, sums of money, accounts, bonds, warranties, covenants, contracts, controversies, promises,
agreements or obligations of any kind, type or description, and any other claim or demand of any
nature whatsoever, whether known or unknown, accrued or unaccrued, disputed or undisputed,
liquidated or contingent, in contract, tort, at law or in equity, any of them ever had, claimed to
have, now has, or shall or may have. Nothing contained in this Amendment prevents enforcement of
this release.
34. No Waiver. Nothing in this Amendment shall be construed to waive, modify, or cure
any default or Event of Default that exists or may exist under the Credit Agreement or any other
Loan Document.
35. Waiver of Right to Trial by Jury. EACH PARTY TO THIS AMENDMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER
THIS AMENDMENT OR ANY LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT OR ANY OTHER LOAN
DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE, AND EACH PARTY HEREBY
AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
36. Counterparts. This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed and delivered
shall be an original, and all of which together will constitute one and the same instrument.
Receipt by the Administrative Agent of a facsimile copy of an executed signature page hereof will
constitute receipt by the Administrative Agent of an executed counterpart of this Amendment.
37. Costs and Expenses. Each Borrower agrees to pay on demand in accordance with the
terms of the Credit Agreement all costs and expenses of the Administrative Agent in connection with
the preparation, reproduction, execution and delivery of this Amendment and all other Loan
Documents entered into in connection herewith, including the reasonable fees and out-of-pocket
expenses of the Administrative Agent’s counsel with respect thereto.
38. Governing Law. This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with, the laws of the
State of Ohio.
39. Headings. Section headings in this Amendment are included herein for convenience
of reference only and will not constitute a part of this Amendment for any other purpose.
40. Patriot Act Notice. The Administrative Agent hereby notifies each Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub.L.10756 (signed into law
October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of each Borrower and
other information that will allow the Administrative Agent to identify each Borrower in accordance
with the Act.
[Signature Page Follows.]
IN WITNESS WHEREOF, the Borrowers, the Administrative Agent, the Lenders and Issuing Bank have
hereunto set their hands as of the date first set forth above.
| BORROWERS: FRANKLIN CREDIT MANAGEMENT CORPORATION |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
| FRANKLIN CREDIT HOLDING CORPORATION |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxx | |||
| Title: | President | |||
| ADMINISTRATIVE AGENT AND ISSUING BANK: THE HUNTINGTON NATIONAL BANK |
||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
| LENDER AND RISK PARTICIPANT: HUNTINGTON FINANCE, LLC |
||||
| By: | ||||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | President | |||
EXHIBIT 9(b)
Other Closing Deliveries
| 1. | Required Lender Consent Agreement | |
| 2. | All governmental and third party consents and approvals necessary in connection with the Settlement Agreement and the documents to be executed in connection therewith | |
| 3. | Closing Certificate of each Loan Party to Settlement Agreement with the following Exhibit: |
| A. | Corporate/LLC resolutions or member shareholder actions, as applicable, authorizing execution, delivery and performance of Settlement Agreement and related Settlement Documents |
| 4. | Certified copy of an audited balance sheet of Franklin Credit Loan Servicing, LLC dated as of December 31, 2010 |
